Nagging questions about natural gas

Published: Friday, December 7, 2012 at 07:13 PM.

The U.S. Environmental Protection Agency has undertaken a large study of hydraulic fracking, with a draft report due for release next month, according to The Washington Times.

Fracking, as it is known, is the process in which water, sand and chemicals are used to fragment underground rock, unleashing trapped oil and gas.

While the jury is still out on the environmental risks of fracking — with few confirmed cases of contamination — it is important to recognize that the industry faces other potential hurdles, as well.

For example, an analysis in the industry publication Rigzone.com suggests that while gas reserves are vast, individual wells lose significant productivity after five years.

Furthermore, at today’s bargain-basement gas prices, drillers may be reluctant to incur the expense. Instead, projects could be postponed until supply diminishes and prices rise. If so, that could return historic volatility to the natural gas market and undercut today’s attraction of low cost.

At the current price, as the article noted, businesses such as trash haulers can reduce fuel expenses by up to 50 percent by shifting to natural-gas fueled truck fleets.

That’s a powerful incentive. Yet big infrastructure investments would be needed to enable more natural-gas fueled transportation. Without price stability and sustainable supply, investors could be unwilling to risk the capital.

One of the great success stories of recent years is U.S. energy production, particularly natural gas. A recent Associated Press article joined the lengthening parade of reports touting the growing acceptance and economic importance of this domestic fuel.

To be sure, the expansion of the natural gas supply, and consequent price drop that has made it unexpectedly affordable, are game-changers:

Natural gas reduces deadly air pollution because it burns far more cleanly than coal or oil. It is also more efficient.

Shifting the nation’s fuel habit toward natural gas has the effect of shrinking U.S. dependence on foreign oil. (While our biggest source for that is now friendly Canada, the turbulent Middle East remains a significant player.)

The natural gas industry has become a job creator — and could attract other manufacturing jobs because of this available, affordable resource.

As welcome as natural gas growth is, however, Americans should not lose sight of the sobering realities that attend this advancing story.

Foremost among the caution flags is the potential for the gas-drilling technique of hydraulic fracturing to damage or overuse major sources of drinking water.

The U.S. Environmental Protection Agency has undertaken a large study of hydraulic fracking, with a draft report due for release next month, according to The Washington Times.

Fracking, as it is known, is the process in which water, sand and chemicals are used to fragment underground rock, unleashing trapped oil and gas.

While the jury is still out on the environmental risks of fracking — with few confirmed cases of contamination — it is important to recognize that the industry faces other potential hurdles, as well.

For example, an analysis in the industry publication Rigzone.com suggests that while gas reserves are vast, individual wells lose significant productivity after five years.

Furthermore, at today’s bargain-basement gas prices, drillers may be reluctant to incur the expense. Instead, projects could be postponed until supply diminishes and prices rise. If so, that could return historic volatility to the natural gas market and undercut today’s attraction of low cost.

At the current price, as the article noted, businesses such as trash haulers can reduce fuel expenses by up to 50 percent by shifting to natural-gas fueled truck fleets.

That’s a powerful incentive. Yet big infrastructure investments would be needed to enable more natural-gas fueled transportation. Without price stability and sustainable supply, investors could be unwilling to risk the capital.

Despite the challenges, natural gas is gaining against the dominance of oil and coal. We find this encouraging, but urge the industry and government to do two things:

Release a thorough, scientifically accurate and peer reviewed report on the safety of fracking and horizontal drilling, and make sure regulations reflect the findings.

Require full public disclosure of drilling risks (including chemicals used in the process) and rigorous approval regimens. They should tie best practices to local geological conditions and water supply.